Bogleheads

[johnanglemen]

Before I discovered this forum, I was an amateur investor who poured some cash into a bunch of individual stocks. Some of these are way up (e.g. goog) and some are way down (e.g. citibank).

Now I've "seen the light" and am putting all of my future investment cash into low-fee Vanguard index funds. However, I'm not sure what to do with these individual stock investments, most of which are still within the short-term capital gain/loss window. Are there any reasons to hold onto these stocks if my future investment plans call for index funds? Or should I just sell everything now regardless of their performance?

I don't mind waiting for a stock like Google to hit long-term capital gain rates before I sell it but I'm wondering if there's any reason to hold onto a loser like Citibank..

[YDNAL]

OK, John,

http://www.bogleheads.org/foru....ht=#566621
I've followed some of your posts since the first (above).

Have you developed a long-term plan with goals, Asset Allocation, and steps to implement the plan?
Investment Planning
Asking Portfolio Questions

My $0.02.
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Landy
“The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective.” - Warren Buffett

[johnanglemen]

Um.... yes, I have, as I said in the original post.

http://www.bogleheads.org/foru....p?p=575289

This question is not asking if I should hold a lot of individual stocks as part of my asset allocation over the long term. I've already decided I will not. The question is whether it makes sense to just sell them right away, or whether there are other considerations (such as waiting for long-term capital gains rates). I lean toward immediately selling the ones that I expect to flounder for awhile (e.g. Citibank) but thought I'd gather advice.

[EmergDoc]

Sell the losers immediately, sell the winners after a year. If any are held in a tax-protected account, sell immediately.

Good luck.
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1) Invest you must 2) Time is your friend 3) Impulse is your enemy
4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

[Hexdump]

[livesoft]

Hexdump, would you buy more of those closed-end funds today since they are paying a 9% dividend? If not, why not?

Loss aversion is a classic behavioral finance trap. A method to avoid it, is to always sell all losers before you have held them a year or in Nov/Dec of the current year.

[YDNAL]

[Hexdump]

[johnanglemen]

[retiredjg]

My suggestion is close to EmergDoc's

1) Sell losers immediately.
2) Sell short term gainers to the extent they are offset by short term losers.
3) Sell all the long term gainers.
4) What is left should all be short term gainers - wait the year, then sell.

Of course, if it is only 3% of your portfolio and not all of it will be gains, you might just sell it all and pay a little extra in tax.
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Links to Investment Planning and Asking Portfolio Questions

[grabiner]